Boating boom about to take off in Phuket

There are strong indications of and belief among the vital players that Thailand – and Phuket specifically – has now started its growth and development towards becoming a world class marine destination.
     With Phuket’s second international boat show PIMEX 2004, coinciding with the 18th Phuket King’s Cup Regatta in December, the new US$150 million Royal Phuket Marina project, and, above all, going from 217 to 7 percent tax on boat imports, the marine leisure industry in Thailand is about to take off much more than ever before.
     And with Ferrari on board, along with all kinds of tourism businesses, the interest for the expo on 9-12 December is likely to be global and huge.
     “What make Thailand unique are not the famous beaches or even the top 5-star hotels, but the best cruising waters for yachts anywhere in the world. Couple that with Thailand’s other advantages and you have an irresistible destination for cruising, yacht-charter holiday-makers and boat owners who live elsewhere – not to mention locally-based Thai and expatriate enthusiasts,” says managing director Grenville Fordham of the PIMEX organisers.
     “Thailand has more stunning cruising grounds than anywhere in the world.”
     And a couple of well-established Swedes are very much part of the show. As one of the biggest exhibitors, the well-established Swedish yacht broker Håkan Lange will especially present the popular speed-boat X2K built by North Sea Boats and designed by its owner, the Java-based Swede John Lundin.
     Håkan describes this boat to be of very high standard at a very competitive price and only the beginning of a series of new and exiting boats using the latest technology, design and material from the Formula 1 offshore racing circuit.
     John Lundin has boat building and shipyards in his blood and is carrying on the tradition from his father (Allan Lundin) who was the owner of Swede Ships and built some of most advanced and sophisticated yachts Sweden has ever produced, Håkan tells ScandAsia.
     What is striking when visiting any beach paradise destination in Thailand and looking out on the sea horizon is the relative lack of or non-existence of boats and yachts. You only see the lights from the fishing boats in the night. Unlike many other countries like in the US, the Caribbean, France, Greece, Turkey and more recently Croatia, Thailand does not have a well-developed marine tourism. But with its, according to Håkan, “superior environment compared to elsewhere in Asia” that is about to change very soon, so visitors will see a lot more of boating as lifestyle from now on.
     In fact Phuket is already the regional centre for yachts and boats even if Langkawi in Malaysia, with the right kind of regulations, has prospered in building up its marine sector with four marinas.
     “Phuket is definitely the center and it’s going from strength to strength with new companies making long term commitments in all sectors of the industry. Obviously, by learning from mistakes made in other parts of the world, it’s a fast forward progress mode where more and more local job opportunities are created and all the complimenting services that a boat owner want to have access to is available. With the recent initiative of tax reduction, new marinas and a serious initiative from TAT to promote Thailand as a leading boating destination, it’s all looking quite promising although there is bound to be some bumps on the road,” says Håkan.
     According to Grenville, Langkawi is today used as a ‘visa run’ destination for yachts but that will probably soon no longer be necessary as the improvement of the regulatory environment is under way.
     “Any yacht (motor or sail) is granted a six-month stay in Thailand without being imported. That can be extended for a further six months. After that period the boat must either leave the country or be imported. In reality, many boats make the Langkawi run and then return with a new six month stay,” Grenville explains. More complicated are the immigration rules, allowing only one month stay for the skipper and crew.
     “Charter in Thailand is already competitive. The problem has been lack of boats/operators,” he says.
     However, with the tax reduction this is changing quickly now.
     “It has made owning a boat in Thailand and keeping it under Thai flag much more appealing. The charter industry is the one sector that has responded quickly with quite a number of new boats being imported to Thailand,” says Håkan who, having before put emphasis on Singapore and Malaysia will now open his new office in Phuket coinciding with PIMEX.
     “As a boating destination Thailand has the best overall package to offer to boaters and that is the main reason for yacht sales and service companies to establish a presence in Thailand.”
     For PIMEX and also the Royal Phuket Marina (RPM), a residential and leisure marina aiming at making the island Asia’s boating capital, the tax reduction and the Thai government’s new direction to promote marine tourism came with perfect timing.
     “Both were conceived before there was any indication that taxes and regulations would be eased,” says Grenville and referring to himself, “it may seem that both Gulu Lalvani (who conceived RPM) and Grenville Fordham were gifted with mystical foresight.”
     “It was mainly a big hole and we decided to take the plunge/risk and try to stage a show here.”
     In terms of facilities, new marinas are critical to the exponential growth of a marine tourism industry, according to Grenville.
     “Major international yacht charter companies will not operate without marinas. The challenge is to overtake demand. RPM will almost certainly be full the moment it opens. It will take two or three more marinas in Phuket before capacity begins to exceed demand.”
     Also a series of small, municipal marinas spread throughout the most popular cruising areas will be needed.
     “As the high season is just beginning, the marinas that are currently operating are 100 percent full. However, the new (RPM) will be opening its gates towards the end of the year and some 80 new berths will be available, primarily for its residents,” says Håkan. Several new marinas are also being developed in various parts of Thailand.
     When asked about the target groups he says that the majority of boat owners in Asia today are non Asian and that the market is quite saturated. There is also quite a flow of people who are settling down in Phuket with a second home and one of the first things they want after their house is completed is a boat.
     “We meet a wide variety of potential customers and some are very experienced and know exactly what they want and others need a lot of guidance and time to feel sure they are getting the right boat for their current needs. However, the future market is local and there is a new generation that through their overseas studies has been exposed to boating and they are now moving up the ladder and want to take up boating as a life style in their home country.”

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